About Sage

Employee questions on auto enrolment

With the automatic enrolment wheels firmly in motion, employers are required to automatically enrol eligible employees into a qualifying pension scheme. Don’t panic if you’ve not had any direct correspondence about it yet, the process is being staged over a 6 year period.

Your deadline will depend on the size that your business was on 1 April 2012; the ‘staging dates’ will run right through until 2017.

What does ‘I’m in!’ actually mean?

Even though your staging date might not be for a few years yet, we know that your employees will soon be asking questions.

When will this start?

How do I know if I am eligible?

If you’re aged between 22 and state pension age with earnings equal to (or greater than) the earnings trigger salary which is currently £8,105 then you are eligible.

How much money will I lose from my salary and how much do you contribute?

The minimum levels of contributions has been set by Government and will depend on our staging date.
To start with just 1% of your pay will be automatically deducted from your salary and invested in a pension scheme. This will include tax relief. Employers must also add an additional 1% initially.

Check out the table below to see contribution levels by date:

I don’t want to save at all. How do I opt out?

The responsibility to opt out of pension contributions is entirely yours. You need to complete an ‘opt-out’ notice. If you fill this in within a month, your involvement will be cancelled. If you don’t return it within a month then you will start to build up a pension pot which will (once you’ve opted out) sit there until retirement.

Remember though, if you do opt out then you will miss out on the contribution from me (your employer).

I don’t want to save right now but might change my mind in the future, what should I do?

Those who opt out will be enrolled again every three years by their employer if with the same business. If you move jobs then you’ll be re auto enrolled within three months of being there. If you want to opt out again then you’ll have to start the process once more.

What if I die before I get to the retirement age?

Upon joining, you will be asked to complete a ‘nomination of beneficiaries form’. If you do pass away before you reach the retirement age then it is this beneficiary that will receive your savings. They will receive a lump sum which is tax free.

How to make sure your business is ready for auto enrolment

We want to support you through this process and understand that employers will be faced with questions about the changes, which is why we have produced guidance to help you.

The Department for Work & Pensions are reportedly investing £8m to raise awareness about automatic enrolment among the UK workforce, so now is the time to ensure that you have a handle on what is happening yourself!